Thanz said:
Well, that is certainly a doom and gloom forcast. The ruin of society as we know it in the coming decades. I disagree with the severity of your forcast. I agree that the aging boomer generation, combined with greater medical technology will cause changes to be made in many programs. I do not see it as the ruin of society.
On a broader note, countires with a more comprhensive social safety net including health care (like Canada and Scandanavian countries) consistently rank quite high on the UN list of best places in the world to live. They have not ruined the economies of these places, and certainly the citizens enjoy a quite high standard of living. I don't recall the US ever topping this list.
You miss the point. It's not about offering medical care to a broader base. It's about a remarkably high number of net recipients of social welfare compared to net providers of funds for that welfare. The numbers are already in place. The aging baby boomers will likely get out of the job marketplace at some point in their lives, and many of them will become net recipients of welfare payments, which includes social security payments and medicare. They will also live longer, on average, than their predecessors. This means a longer period of time for them as beneficiaries of SS and Medicare, and more spent on health care for them due to their longer life spans.
(Medicaid is for younger persons who qualify based on means testing. It could remain relatively static in constant dollars, or could increase if the cost of medical care continues to rise faster than the CPI.)
The generations following the baby boomers are much smaller, except for the so-called "echo boomers," who are mostly the children of the baby boomers themselves. Once the baby boomers are retired and receiving SS and Medicare, there will be more of the elderly living and receiving those benefits than at any other time in our nation's history. Remember also that they will live longer, meaning that the length of time they receive benefits will increase, meaning in the aggregate they will receive a far greater amount in total benefits than anyone ever before. As if that were not bad enough, the problem is compounded by the fact that a smaller proportion of working persons than ever before will be paying the taxes necessary to support those social welfare payments, which means quite simply that the rate of taxation will have to be increased substantially.
This will place a tremendous burden on younger workers, who will find it very difficult just to make ends meet, much less to become net savers, due to their overwhelming and historically inordinately high tax burden. They resultant lack of net savings in the aggregate will mean less entrepreneurship, less capital for capital markets, less liquidity, less consumerism, and an overall slowdown in the economy. The combined effects could easily lead to a severe depression not just for this country, but for the entire globe.
I don't think it's overstating the case to project economic disaster, and thus a ruining of society as we know it today, unless drastic changes take place, either deliberately, or through unforeseen and fortuitous beneficial circumstances. I'm not generally a gloom and doom proponent, but this looming disaster is hard to overlook, given the demographics which already exist. In other words, the die is already cast. The challenge is to make politically difficult decisions now, before it becomes too late to stem the tide of rising red ink.
Here's a link to a brief description of the problem from the Social Security Advisory Board's own website (it is a bipartisan board appointed by the President and Congress to study the problem and to make policy recommendations):
When Baby Boomers Retire
AS
